Fixed deposits present an attractive investment option for investors with assured returns and a fixed maturity period. Banks are the largest issuers of fixed deposits in India and they gain the trust of their investors based on their repute as financial institutions. Apart from banks, corporations also issue fixed deposit schemes to raise capital for investments in business activities. These corporate fixed deposits offer a higher rate of interest and guaranteed return at the date of maturity. However, there is also an element of risk involved because if the company faces financial problems, then secured creditors would have to be paid first before investors can get the interest on their fixed deposits.
Here are some of the benefits of investing in corporate fixed deposits: